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Budgeting & Forecasting applications are often considered inflexible in comparison to Excel, which allows you to add or change formulae and layouts at will.

The inflexibility of Budgeting & Forecasting applications is mainly due to their lack of customization options, which makes it difficult to adapt them to different scenarios. These limitations can also restrict the ability to quickly react and adjust plans as market conditions change. Ultimately, this inflexibility may lead to higher costs for businesses in terms of time and resources spent on manual data entry and adjustment, or even worse force the business to switch back to spreadsheets.

However, some modern budgeting & forecasting applications are starting to incorporate more advanced features that allow users greater flexibility when creating budgets or forecasts.

By utilizing these tools, businesses can create tailored plans that are better suited to changing market conditions while saving time and money. Ultimately, inflexibility can be overcome by utilizing the right budgeting & forecasting application that is tailored to your particular needs.

In selecting the right application, businesses will ensure they have the flexibility and control needed to make accurate and timely forecasts while staying within their budgets. With the right application in place, organizations can stay on track with their financial objectives with minimal effort.

Whether you use Excel or a Budgeting & Forecasting application, they all require a certain amount of time and effort to set up and configure.

This is especially true for users who have limited technical skills or lack the resources necessary to customize their software package.

Due to the inflexible nature of many budgeting and forecasting applications, they are unable to take into account changes in business circumstances that may occur over time, leading to inaccurate projections.

While this inflexibility can be seen as a drawback of these types of applications, some companies find it valuable because it ensures consistency throughout the financial process. By using an inflexible system, businesses can also minimize any human errors that would otherwise be made when manually inputting data.

Ultimately, the inflexibility of budgeting and forecasting applications is a double-edged sword, and it’s up to the user to decide if the benefits outweigh the drawbacks.

At ProForecast we recognise these limitations and have addressed them in two ways, 1) by creating a professional services department which allows users to make and add features to suit their business inexpensively and cost-effectively and 2) by marrying AI & our FP&A consultants to make the setup process quicker and easier.

With many applications, new features are driven by a roadmap that means that users are at the mercy of the timetable of the application provider, with ProForecast we can discuss the features you need, draw up a specification and a fixed price that will then enable the system to be customised to exactly fit the timescale and business requirements.

Whether it is panacea or not the answer depends upon your circumstances, your budget and the application you buy. For any small business, we don’t believe that an application will offer any benefit over Excel, you don’t need other people to contribute to your budget, and you probably don’t need to share them, what you need is a good cash flow forecast. If you understand your business it really should be a piece of cake to build a cash flow forecast which will be adaptable, accurate and suit your business, it’s not rocket science.

However, if your business is more complex with multiple branches, a large cost structure, and many employees, customers and suppliers then a SaaS-based app will probably be worth your while. Depending on the application, you may have access to machine learning AI to help forecast, you might be able to build complex company structures, have multiple bank accounts, add your own calculations, access a template library, integrate into your core accounting application, have an audit trail, sharing capabilities and a host of other tasks. 

Despite all of these features and wonderful gizmos, I can assure you that there will be things that you want to do that the software is just not built to do. We see it time and time again when clients come to us from other applications where they are frustrated by a particular missing bit of functionality that they need for their business.

Because of this, we have a professional services division that will relativity inexpensively customise features so that ProForecast fits your business processes. If we believe that these features will benefit other customers we will contribute towards the cost to ensure that we can incorporate the change into the core application for the benefit of all customers.

In contrast, traditional suppliers are very inflexible and if you require a change you have to go through their lengthy product development process which can take years. Even then they may not make the change as it might benefit only a small number of customers. Many of our clients come to us because they were frustrated by the lack of customer service and innovation from their previous supplier.

Having said all of that every application needs both a financial investment and an investment in your time and resources to maximise the value. If you simply want to press a button and magically create your budgets and forecasts, I have to tell you that it wont happen. You need to spend time to craft your setup and first budget, but the good news is that once you have done that the time and cost savings going forward will be immense.

In Summary

SaaS-based budgeting & forecasting apps have many features and benefits which will be appealing to businesses of all sizes, but depending on your business you might not need them all. Our approach is different in that we don’t force users to use the features that they don’t need and we will actively work with them to add the features that they do need if we don’t have them. Ultimately, it’s your choice and you need to decide what is best for your business, but I would conclude that SaaS based applications are neither a panacea or a headache, but a very helpful tool.

The Success of Powerful Non Financial KPIs is seen in the results of businesses that make better decisions about resource allocation.

Trends in non-financial KPIs can give valuable insights into how a business is performing, with a variety of non-financial KPIs that can be tracked, depending on the business and its sector.

Some common examples include employee turnover rates, safety records and production levels. The real value though comes from tracking the key business drivers, the sales pipeline and customer satisfaction levels.

If you have a firm handle on the source of your business then you can spot hidden dangers that might lead to future problems, and equally, it is no good having a successful sales machine if customer satisfaction levels are declining and you keep losing customers.

Taking a deep dive into the sales pipeline, website visitors, social media clicks, engagement, followers, cost per click, cost per lead, lead sources, and conversion rates per lead source will reveal the true health of your sales pipeline and allow management to take action at an early stage if any keys indicators start to deteriorate.

For example whilst sales values, pipeline value and conversion rates may superficially look healthy, a deep drill down may reveal that the fundamental drivers, website visitors’ clicks and social media engagement are slowing or declining, which in the future will adversely affect the pipeline. In this way, management can make early interventions before the damage becomes real.

Similarly, the emphasis on customer satisfaction can not be overstated, there is no point in pouring more resources into acquiring new customers if they are then leaking out of the bottom.

Customer satisfaction needs to be closely monitored and needs to be a key part of the monthly management review, its a fantastic way to highlight hidden problems, if customer satisfaction levels are trending downward, this could be an indication that the quality of products or services is declining, or that the business has stooped innovating and that products are losing relevance.

Another valuable non-financial KPI is employee satisfaction levels, poorly motivated staff will affect customer satisfaction and lead to increased staff turnover, with the resultant cost of recruiting and training replacements and the loss of the corporate knowledge base. Some further excellent examples of non financial KPIs can be found at https://www.clearpointstrategy.com/nonfinancial-performance-measures/ and https://www.cgma.org/resources/tools/essential-tools/kpis.html

There is however a great deal of difficulty in collecting the information and assimilating them into intelligent dashboards . The information is hidden in disparate departments and software packages which can be difficult to access promptly and is dependent upon how they can be retrieved and integrated into your budgets and forecasts.

The answer to this difficulty is to integrate those various software packages by direct integration into your budgeting and forecasting process. Proforecast has developed several relationships with integration partners that enable us to offer a wide range of custom integration packages so that we can quickly build custom integrations for the majority of CRM, Payroll, HR and social media packages, indeed any application with a restful API and feed the outputs into dashboards specifically designed for the individual business.

When coupled with ProForecast’s Rapier Ai forecasting tool it can become an extremely important addition to your management toolkit, please book a demonstration to discuss how we can help you.

One of the most difficult aspects of managing projects is integrating them into the company’s core budgets and forecasts. This is because projects are often seen as separate entities to be managed separately from the core business. However, this should not be the case, as projects can have a major impact on the overall budget and forecast for a company, and they need to be carefully considered when creating these financial documents.

There are many ways to manage budgets and many excellent software packages that enable users and teams to manage projects, this type of software can help track the progress of a project, as well as the costs associated with it, each has its own set of features.

Whatever software you choose that meets the needs of your company and your project, very few will integrate into the core financial packages that business’s use to run their business.

Consequently, Projects are either not properly integrated or have to be integrated using Excel spreadsheets with all the associated dangers, or by using a burn-down chart.

A burn-down chart shows the progress of a project over time and can be used to estimate the costs associated with the project or for multiple projects. However, this is a very crude method of integrating into a budget.

There are two aspects to projects, the financials and the time to deliver, both need to be considered and businesses need transparency so that they can be measured and recorded.

At ProForecast we are excited to announce that we have tackled these problems by creating a fully integrated budgeting and project management tool which gives users the ability to create multiple projects with daily bills of material, allowing users to accurately and simply record activities and the exact time that costs are incurred.

These values then flow directly into the company’s core budgets. Project managers can access the tool without necessarily having access to the core financials, access is controlled by permissions granted by the finance team.

The tool is so comprehensive that for activities that use subcontractors who are subject to CIS any payments are adjusted to account for the withheld tax, each activity and component will have its individual debtors and creditors’ terms and it includes the ability to model both supplier and client retentions and the release or write off. Projects can extend over any period and the bill of materials clearly shows all the activities and costs.

Additional reports include, cost burn down, time burn down, project income and cost statements, all integrated into the core budgets, users can build their own KPI reports or ask Proforecast to do so.

ProForecast is going to continue to develop this module and will be adding the ability to add files and documents to activities but want to hear from users about what features they would like to add. We will carefully review and add to our development pipeline.

If you would like to have a demonstration of our new beta Project Management tool please book a demonstration on our website, www.proforecast.com, we will be launching the application as part of our live product in mid-November 2022.

Do you ever feel like your budget is a little “off?” That’s because it probably is. When you build formulas into your budgeting process, you’re relying on unproven formulae that sometimes create errors, contain broken links and formulae that can be altered by others.

This can lead you to create inaccurate budgets and forecasts, which can have a huge impact on your business. In this blog post, we’ll discuss the benefits of building formulas into your budgeting process using a proven FP&A platform such as ProForecast.

Building formulas into your budgeting process has a number of benefits.

Firstly, you can more accurately forecast costs. This is because you’re using the most appropriate method of cost calculation, rather than simply inserting a value.

Secondly it creates consistency, eliminating random values or guestimates . It is essential though that your formulae are well built and accurate. If your using Excel there are some good examples and useful tips at www.agcapitalcfo.com/10-excel-formulas-we-use-in-budget-creation/

In ProForecast building formulas into your budget is a very simple process, these are proven and trusted formulae which can’t be broken by inexperienced users.

Examples of ProForecast Inbuilt Calculations

In Proforecast there are over 300 purpose built proven and tested business process templates, for instance if you can create your departmental cost budget using a simple drop down list that can be selected for each overhead, for example:-

i) a % of sales by company

ii) % of departmental sales

iii) % of salaries

iv) % of fixed assets

vi) a sum amortised over 12 months

vii) a seasonally amortised sum

viii) a cost per employee

ix) a manual entry

xi) an amortised value subject to a growth rate.

Advanced Calculation Features in ProForecast

In addition each overhead can make use of our step change function which enables the cost to be flexed up or down throughout the life of the budget or forecast and every cost can be further amended by selecting whether any type of prepayment and accrual.

This is a highly accurate and simple method of inserting reliable and tested calculations which will increase the budgets accuracy and if you operate a decentralised budgeting system will allow your departmental heads to build their budgets accurately without introducing calculation errors.

Book a demo using the button on our homepage www.proforecast.com/

To be successful it’s important to have accurate information about future demand for your products or services. That way, you can make informed decisions about production levels, inventory, staffing, and other aspects of your operation. ProForecast demand forecasting can help you get that information.

ProForecast uses Rapier artificial intelligence (AI) to predict future demand for your products or services. Rapier takes into account a wide range of factors, including historical sales data, seasonality, and economic trends, but can also include social media activity and even account for delays in the port of origin for imported goods. This makes it much more accurate than traditional methods of forecasting demand.

Rapier is constantly learning and improving its predictions, a process that is accelerated by the feedback loop Proforecast provides. As customers purchase goods or services, that information is fed back into Rapier, which then refines its predictions for future demand.

This means that Proforecast can provide you with an ever-more accurate picture of future demand, so you can make better decisions about your business. In a rapidly changing world, having this kind of information can give you a critical competitive advantage.

Rapier has been developed by ProForecast’s data scientists, Innovate UK and Sunderland University and is a proven application with over 98% medium turn accuracy over the first six months of any projection, over the subsequent 6 months the accuracy gradually diminishes, but by regularly reforecasting Rapier constantly updates and learns, so maintaining the ongoing accuracy.

Rapier has a further unique feature, its not a black box where the user has no control. the user at all times has total control over the outputs and can amend them quickly and easily, so if as a management team you are aware of reasons why Rapiers predictions will be inaccurate they can be amended and overwritten.

Rapier is being integrated into the entire range of ProForecast’s accounting connectors, such as Sage Intacct, Sage 200, Sage 50, Accounts IQ, Xero, Quickbooks, with NetSuite, Microsoft Dynamics and Exact also being added.

Integrations into the following commercial applications are also available-

CRM systems – Salesforce, Monday, Soho, Hubspot, Slack & Sugar.

E-commerce – Magento, Shopify, Ebay, Google Shopping, Amazon and Lightspeed.

E-mail marketing – Mailchimp, Mandrill.

Helpdesk – Zendesk

Databases – Google Big Query and Snowflake

Our generic connector can also connect to any application with a restful API, and so in this way the ProForecast demand forecasting module can be configured to your exact requirements.

If you would like to learn more about how Proforecast demand forecasting can help your business, please contact us. We would be happy to discuss your specific needs and show you how our service can benefit your operations.

Top 5 faults in forecasting

• Tops Down Sales Forecasting. This is when, to achieve an artificially imposed revenue number on the business annual sales targets are introduced into the forecast, without any real substance behind how they will be achieved. A noose around the sales guy’s neck. To be an incentive targets must be realistic. It’s like offering £3,000,000 for the first person to high jump 3m, its 55cm higher than the current record, set in 1993 by a chemically enhanced Cuban, so not possible and not an incentive.

• Magic Margins. Setting margin targets which can only be achieved by increasing prices to unsustainable levels. When setting selling prices in a forecast, ensure they represent a competitive selling price not a crack pipe to delude your audience. Again, Sales beware. You may have guessed that I have run sales in a number of organisations and have been on the receiving end of such fanciful targets.

• Keep it real. Forecasts are a view of the future and as such inherently full of potential inaccuracies, you don’t know what you don’t know. Make sure your forecast is representative of historical performance and tune the outcomes to take account of the things you do know with a reasonable degree of certainty. If Amazon said they were going to increase warehouse staff during the festive period at no incremental cost as Jeremy Clarkson, David Tennant, Scarlett Johansson and the other talent contracted to Amazon Prime Video productions were going to pull free shifts picking and packing as part of their contracts. Amusing though that might be, its unlikely to true. Make sure you associate the fully loaded costs to everything you include in your forecast.

• Deferred Revenue. Software licences, maintenance contracts and many other services come with an upfront payment for a time period, typically one year. Such revenue is meant to be recognised pro rata over the period it covers. Just remember you’ve had the cash and no more is coming so don’t be surprised if you spend it all up front and still have the liability of providing the service that there may be a hole in your cash flow.

• Just how much is your stock worth? Over stating the value of your stock to shore up your balance sheet isn’t a new form of creative accountancy; Ted Baker seem to have been doing it for years to accumulate a total of £25,000,000 over valuation. That’s a lot of shirts and shoes. Remember that inventory has a shelf life after which it starts to become worth less than you paid for it. That’s what sales are for, to move slow moving stock, don’t just let it accumulate and report it at full value. It will come back to bite you, even the dimmest board will catch on sooner or later. If not them the auditors will. We’ve all done it every now and then, it only works if it’s a short-term fix/fudge.

Using a powerful strategic planning and forecasting tool will allow you to avoid some or all of these faults and many more beside. ProForecast let’s you build your strategic plan and take into account all of these and many more vital statistics before producing your forecast.

Start now with ProForecast with a 30-day free trial at https://proforecast.com/free-trial/.

Mark Harrison

Cheif Commercial Officer

Using What-If scenario analysis to make smarter decisions

George W Bush won’t be remembered as one of the great US presidents, however he was unjustly ridiculed for this very pertinent bit of advice, “You don’t know what you don’t know”. Or as Harold MacMillan said when asked, what was most likely to blow a government off course he answered, “events my dear boy”.

In today’s world the only certainty is uncertainty, never, have so many of the fundamentals of business been up in the air and open to interpretation. So, here are our top 10 of the most used What If Scenarios.

• What If demand increases 20%
• What If export tariffs change?
• What If the exchange rate changes?
• What If my supplier costs increase 5%?
• What If there is a shortage of Raw Materials?
• What If sales decrease by 3%?
• What If we increase headcount by 8%?
• What If stock in transit days increase?
• What If I introduce a new product?
• What If I increase my debt levels?

What If, What If, What If.

Does your strategic planning and forecasting solution give you the agility to react to the unexpected?

What If you could see the impact of your decisions before you made them?

With ProForecast you can.

With our Micro and Global What If planning tools you can test unlimited scenarios and see their impact. Then only implement the changes to plans once they are ready and tested.

Are you equipped to react quickly to shifting markets and changing demands?

Start now with ProForecast with a 30-day free trial at https://proforecast.com/free-trial/.

ProForecast is the leading strategic planning and financial forecasting tool for business and accountancy practices, so don’t forget to book yourself in for a demo to ensure you get the best out of the system.

Mark Harrison

Chief Commercial Officer

ProForecast

Time needed to create a forecasting model

No matter how good you are at using Excel, it is going to take a lot of time and effort to create a model that can be used to produce a meaningful detailed forecast for your business with the outputs and analytics you need to make informed decisions about the future strategy of your business. If you are as busy as most finance professionals are, locking yourself away for a few days to create a model just isn’t an option.

Inherent risk in distributing your forecast

Once you have created your forecasting model in Excel and populated it as best you can, you now have to distribute it to the various stakeholders in your organisation for their input. Once they have done so and returned the model to you, you have to take the time to consolidate all of their updates back into the core model all the time hoping they haven’t changed any formulas, broken links to other tables or added and deleted rows or done anything else that will break your model.

Security

Forecasts contain a lot of sensitive information around salaries, staffing levels, product launch or discontinuation, marketing plans etc. Once an excel spreadsheet has been attached to an email its in a position to be distributed more widely and potentially to a competitor or the wrong staff. Once you attach a working model to an email you have lost control.

Extracting the data to produce management reports

Now you have a forecast, you have to produce easy to understand reports and graphs in a format that visualises the data that it’s easy to understand when forming the basis of a management or board report. How do you drill down to show a greater level of granularity to provide an analysis of how you arrived at a certain assumption and if a number of people have worked on a plan what were those assumptions can be time consuming and potentially impractical to derive.

Scenario Planning

Forecasts are just that, an educated guess at future performance, normally taking historical data and projecting it forward based on the commercial expectations of the business, “what have I got to do to make the number”, in a spreadsheet, applying global and micro what if scenario planning can be very complex and will probably break your model, every forecast at least needs a base case, worst case and stretch scenario to stress test it but to be really meaningful it needs to take into account, changes in anything and everything, from exchange rates to extended stock in transit days, to cost of capital to fund projects or factoring, the list goes on. To capture these in one spreadsheet to be tuned to the various micro scenarios that can affect your business is extremely difficult and the chances of inaccuracies skewing results are very high.

Top 5 Benefits of replacing my Excel forecasting Model with ProForecast Cloud forecasting

Industry Specific Models

ProForecast comes with inbuilt industry specific models to help you create a model tailored for you and your needs.

Easy and safe to share

Once you have created you model in ProForecast you can share it and assign edit rights to others. Centralised Data Entry on a cloud-based system mean that all updates are captured by the application centrally removing the requirement for manually consolidation of updates and changes. Using an application ensures a consistent workflow in forecast creation.

As only the users with edit rights can share the plan and an audit trail is kept, it makes the data used secure.

Instant Results

Once a plan has been completed or updates are made, one click is all you need to update all reports and charts.

Scenario Planning made easy

Any parameter in the forecast can be amended with step changes as part of and Micro What If scenario planning that you may want to model or the whole plan can be tuned to a Global What If all with a few clicks. One click more and a full set of reports to analyse and charts to visualise the data are instantly available.

Integrated to your Accounts

ProForecast allows you to import your accounts directly to the application. Being in the Cloud means you can securely work on your forecast on any device anywhere you aren’t constrained to a desktop in your office.

Still not decided? Signup for a 30 day free trial of ProForecast at https://proforecast.com/free-trial/ and don’t forget to book yourself in for a demo to ensure you get the best out of the system.

Mark Harrison

Chief Commercial Officer

ProForecast

11/09/2019